Correlation Between Flexible Solutions and Global E
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions and Global E at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Flexible Solutions and Global E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Global E Online, you can compare the effects of market volatilities on Flexible Solutions and Global E and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Flexible Solutions with a short position of Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Global E.
Diversification Opportunities for Flexible Solutions and Global E
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flexible and Global is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online and Flexible Solutions is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Flexible Solutions International are associated (or correlated) with Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Flexible Solutions i.e., Flexible Solutions and Global E go up and down completely randomly.
Pair Corralation between Flexible Solutions and Global E
Considering the 90-day investment horizon Flexible Solutions is expected to generate 2.21 times less return on investment than Global E. In addition to that, Flexible Solutions is 1.02 times more volatile than Global E Online. It trades about 0.03 of its total potential returns per unit of risk. Global E Online is currently generating about 0.07 per unit of volatility. If you would invest 2,283 in Global E Online on September 3, 2024 and sell it today you would earn a total of 2,945 from holding Global E Online or generate 129.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Global E Online
Performance |
| Timeline |
| Flexible Solutions |
| Global E Online |
Flexible Solutions and Global E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Global E
The main advantage of trading using opposite Flexible Solutions and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions position performs unexpectedly, Global E can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Global E will offset losses from the drop in Global E's long position.| Flexible Solutions vs. SPACE | Flexible Solutions vs. Bayview Acquisition Corp | Flexible Solutions vs. T Rowe Price | Flexible Solutions vs. Ampleforth |
| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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